Population growth: what role does immigration play?

Harriet Spinks and Elsa Koleth, Social Policy Section

Immigration and population growth

In 2009, Australia’s population grew by two per cent with
Net Overseas Migration (NOM) accounting for 64 per cent of this
growth and natural increase (births minus deaths) contributing 36
per cent. Migration flows are therefore a key factor contributing
to population growth.

Given the significant growth in NOM in the last few years, it is
not surprising that recent debate in Australia on the issue of
sustainable population levels has focused largely on the role of
immigration in contributing to population growth. However, in
considering this issue it is important to understand what actually
comprises ‘migration’ in the NOM data. NOM is the
addition (or loss) to the resident population arising from the
difference between those leaving Australia and those arriving,
either permanently or on a long-term basis (in the county 12 months
or more over a 16 month period). This includes long-term temporary
entrants such as overseas students, New Zealand citizens, and
Australian permanent residents or citizens returning home after an
extended absence.

The largest contribution to NOM in recent years has not been
permanent migrants, but people entering Australia on long-term
temporary visas, in particular overseas students and temporary
skilled migrants. Unlike the permanent Migration Program, temporary
migration is not subject to planning levels or caps set by
government. Governments also have no control over the numbers of
Australian citizens and permanent residents leaving or returning to
Australia. Similarly, New Zealand citizens enjoy free movement
under the Trans Tasman Travel Arrangement. It is therefore
important that the degree to which the government is able to
directly impact NOM, through its planned Migration Program, is not
overstated.

The migration program

Since 1945 Australia has run a managed Migration Program, under
which places are allocated each year for people wanting to migrate
permanently to Australia. The Migration Program comprises a skilled
stream, a family stream and a special eligibility category covering
former residents who had not acquired Australian citizenship and
who seek to return to Australia as permanent residents.
Humanitarian entrants (approximately 13 000 annually) are not
counted under the Migration Program.

The Migration Program has evolved over the years from a focus on
attracting migrants for the purpose of increasing Australia’s
population to a focus on attracting skilled migrants in order to
meet the labour needs of the economy. As a result, Migration
Program planning numbers have fluctuated according to the
priorities of the government of the day.

Over the last decade the planned migration intake increased
steadily, with numbers reaching a record high of 190 300 in
2008–09, until 2009–10 when the planned intake was
reduced to 168 700. It has been kept at this level for
2010–11.

Recent changes to the skilled stream of the Migration Program
have been designed to shift the balance of the program away from
‘supply driven’ independent skilled migration towards
‘demand driven’ outcomes, in the form of employer and
government-sponsored skilled migration. The intention is to enable
the program to better target the skills needed in the economy and
ensure that skilled migrants are employed in industries that have
the highest need.

Temporary migration

Temporary migration, which is not subject to annual caps, has in
recent times been driven largely by demand for labour and education
services. Temporary skilled migration increased markedly between
2004 and 2008 as employers sought to fill skills shortages, but
began to decline in 2008 in response to prevailing economic
constraints. The number of overseas students coming to Australia
has also increased dramatically in the past five to ten years,
making international education one of Australia’s most
profitable exports.

Close connections have evolved between permanent and temporary
migration as temporary migrants have increasingly sought to apply
for permanent settlement in Australia. By 2007–08 up to 40
per cent of visas in the permanent skilled migration program were
granted to people who initially came to Australia as temporary
migrants, largely Subclass 457 visa holders and overseas
students.

Temporary migrants
Overseas students and business long stay (a) visa grants

Year

Overseas students

Temporary business (long stay) 457 visas

(a) Visa subclass 457.

Source: J Philips and M Klapdor, op cit.

2000–01

146 577

36 900

2001–02

151 894

33 510

2002–03

162 575

36 800

2003–04

171 616

39 500

2004–05

174 786

49 590

2005–06

190 674

71 150

2006–07

228 592

87 310

2007–08

278 180

110 570

2008–09

320 368

101 280

The Rudd Government introduced a number of reforms to the
skilled migration program. These reforms attempt to manage the
links that have evolved between temporary and permanent migration
so as to ensure that they operate to serve Australia’s skills
needs and contribute positively to the Australian economy.
Substantial reforms to the skilled migration program were announced
in February 2010, following a period of unprecedented growth in
overseas students in the vocational education sector concentrated
in a small number of trades such as cooking and hairdressing. The
reforms made priority access to permanent migration contingent upon
the achievement of concrete employment outcomes.

There is no doubt that migration flows are significant drivers
of population growth in Australia. Managing migration in accordance
with Australia’s population challenges and economic
objectives will inevitably be a priority for the new
parliament.